Mumbai: Shares of the rating company Credit Analysis and Research Ltd (CARE) gained 23.2% on their trading debut on Wednesday after receiving strong demand in the Rs.540 crore initial public offering (IPO).
CARE shares opened at Rs.940. They rose as much as 31.5 % from the IPO price of Rs.750 to Rs.986.20 on BSE Ltd before paring their gains to end at Rs.923.96. The benchmark Sensex rose 0.84% to 19,417.46 points.
Investors were attracted by CARE’s fundamentals as the ratings provider is seen as having a strong net worth position and no debt on a consolidated basis, analysts said. CARE also allocated most of the shares in its IPO to institutional investors, analysts added, boosting the retail bid on the listing day.
“Since people have not been able to get decent allotment in the CARE IPO, there is a lot of appetite on the day of listing as investors are looking at this stock as a good long-term bet,” said Hiten Gala, senior manager advisory at brokerage Sharekhan.
CARE attracted demand for nearly 41 times the shares on offer. The credit assessor’s rivals ICRA Ltd and Crisil Ltd have delivered robust gains in the stock market. Sector leader Crisil has logged a nearly 17% gain so far in 2012 while ICRA has jumped 80.5% in the same period. BSE’s Sensex has risen around 20% this year.
CARE’s is the first of three stock market listings this week. PC Jeweller and Bharti Infratel Ltd are due to make their trading debut on Thursday and Friday, respectively.
Experts aren’t too optimistic that the other listings would attract the same kind of attention from investors as CARE.
“CARE enjoyed a sizeable demand as compared with the other initial public offers. While PC Jeweller’s share sale offer attracted moderate demand, Bharti Infratel did not attract as many buyers,” said Rikesh Parikh, vice-president of equities at Motilal Oswal Securities Ltd.
Parikh expects PC Jeweller to open at a premium but said Bharti Infratel may open flat or at a discount.